Games Workshop shares rise on profits forecast

Games Workshop, the fantasy gaming group, saw a spike in its share price on
Wednesday after it said full-year pre-tax profits were "likely to be
materially ahead" of analyst estimates.

5:45PM GMT 06 Jan 2010

Shares in the group, which makes and sells Warhammer battle games, climbed 77½p to 332½p on Wednesday.

In a trading statement issued on Wednesday, the company said that despite a slight decline in sales in the first half of the year to November 29 2009, December trade was "satisfactory" and it expected pre-tax profits for the year to end of May to be £5m ahead of current market estimates.

Charles Hall, an analyst at KBC Peel Hunt, said they had revised their forecast for the Games Workshop's full-year pretax profits from £9m to £14m, in line with the company's predictions.

He described the forecast as a "very significant improvement" on last year's pretax profit of £7.5m, attributing the predicted rise to improvements in gross margins as well a "greater efficiency in factories and improved stock management".

Mark Wells, Games Workshop chief executive, said on Wednesday that they had announced the forecasted increase after December trading "held up pretty well". He added that the company had worked hard to control costs last year, including imposing a wage freeze. The group will announce its half-yearly results on January 19.